United States Securities and Exchange Commission v. Ahmed

Opinion

UNITED STATES DISTRICT COURT DISTRICT OF CONNECTICUT

UNITEDP laSinTtAifTfES SECURITIES AND EXCHANGE COMMIvS.SION, Civil No. 3:15cv675 (JBA) , De fendant IFTIKAR AHMED, November 5th, 2020 , and

IFTIKAR ALI AHMED SOLE PROP; I-CUBED DOMAINS, LLC; SHALINI AHMED; SHALINI AHMED 2014 GRANTOR RETAINED ANNUNITY TRUST; DIYA HOLDINGS LLC; DIYA REAL HOLDINGS, LLC; I.I. 1, a minor child, by and through his next friends IFTIKAR and SHALINI AHMED, his parents; I.I. 2, a minor child, by and through his next friends IFTIKAR and SHALINI AHMED, his parents; and I.I. 3, a minor child, by and through his next friends IFTIKARRe alinedf DSHefAenLdINanI tAsHMED, his parents,

. R ULING DENYING DEFENDANT’S MOTION TO REDUCE DISGORGEMENT IN THIS CASE FOR THE DEFAULT JUDGMENT ENTERED AGAINST HIM IN THE NMR E-TAILING NEW YORK STATE PROCEEDING

Defendant requests that the Court reduce the disgorgement awarded in the instant case “NbMy Rt hee-T aamiloinugn vt . rOeankd,e erte. da lagainst him (if so determined) in the New York Supreme Court case , Index No. 656450/2017 (“NMR Case”).” (Def.’s Mot. [Doc. # 1325].) Relief Defendants join Defendant’s Motion. ([Doc. # 1343].) The Securities and Exchange Commission (“SEC”) opposes, arguing the motion is premature. ([Doc. # 1367].) The Receiver takes noI. positioBna.c (k[Dgroocu. #n d13 58].) For the reasons that follow, Defendant’s motion is denied.

The Court assumes the parties’ familiarity with the history of this SEC enforcement action, but will briefly review the background relevant to this motion. On October 18, 2017, NMR filed suit against Oak Investment Partners and its related entities (“Oak”) and Defendant in the New York Supreme Court. (NMR Case, Ex. A to NMR’s Mot. to Lift Lit. Stay [Doc. # 1097-1].) On March 14, 2018, the New York Supreme Court entered a default judgment against Mr. Ahmed on the issue of liability “as a result of his failing to answer or otherwise respond to NMR’s complaint.” (NMR’s Mem. in Opp. [Doc. # 1368] at 2.) The Iidss. ue of damages in the NMR Case is reserveIdI .t o triaDl,i swchuiscshi oisn s cheduled for November 2020. ( at 3.)

The doctrine of ArMipSeAnTe sCsa bfloer Lbtidd.s V .t Chaeb lCeoviusriot nf orof mCo ndne.ciding issues that are “mere hypothetical questions.” , 6 F.3d 867, 872 (2d Cir. 1993). In order for a case or controveTrhsyo mtoa bs ev. rUipneio, nit C caarnbnidoet dAegpriecn. Pdr oond s“.c Coon.tingent future events that may not occur as anticipated.” , 473 U.S. 568, 580 (1985). “The doctrine’s major purpose ‘is to prevent the courts, through Navaotiiodnaanlc Oe rgoaf npizraemtioantu forer Madajurrdiaicgaet,i oInnc, .f rvo. mW aenlsthangling themselves in abstract disagreementsA.’”b bott Labs v. Gardner ,o 7ve1r4r uFl.e3dd o6n8 2o,t 6h8er7 g(r2odu Cnidrs. 2013) (quoting , 387 U.S. 136, 148 (1977), ). While anticipated future injury generally precludes a finding that a case is ripe for resolution, courts will sometimes recogniSzeee d, eis.gp.uPteiesr aces rvi. pSeo wciehteyn o ffe aSris otef ras future event may have an immediate impact on present affairs. , , 268 U.S. 510 (1925). In such cases, a court may properly hear a dispute if there is no reasonable likelihood that further factual developNmaet’nl tP waroku Hldo s“psiigtanliiftiyc aAnstsloyc a. vd.v Daenpc’et o[tfh teh eC oInutretr’sio] rability to deal with the legal issues presented.” , 538 U.S. 803, 812 (2003). The SEC asserts that Defendant’s motion is “plainly not ripe because it depends upon a contingent future event,” namely “a monetary judgment in another case that may or may not be imposed.” (SEC’s Mem. at 2.) The SEC further argues that “whether an offset could even be arguably appropriate would necessarily depend on factors that have yet to be determined, such as exactly how the judgment was styled, whether the judIdg.m ent in that ScEasCe v .d Poeensn, Cine nftarcatl, rCeoc.ompensate the same victims for the same conduct, etc.” ( at 2-3 (citing , 425 F. Supp. 593, 599 (E.D. Pa. 1976)).) Defendant maintains that the doctrine of ripeness “actually totally supports the Defendant’s position as both forms of ripeness, Constitutional Ripeness and Prudential Ripeness (sic) are present here.” (Def.’s Reply [Doc. # 1384] at 2.) Defendant argues that since the New York Supreme Court has already rendered a default judgment against him Itdh.at there is therefore an “actual or imminent” injury that is “not conjectural or hypothetical.” ( ) He contends that “[t]he factual issue of the amount of judgment tmhauts tw ill be assessed in the NMR case is not determIidn.a tive of the legal issue that such amount be offset against the disgorgement in this case.” ( at 3.) The Court agrees with the SEC and finds this motion to be premature. Defendant’s motion specifically requests a reduction of disgorgement by the amount rendered against him in the NMR Case only “if so determined.” Damages in the NMR Case have been reserved for trial and the trial has not yet taken place. (NMR.’s Mem. in Opp. at 3.) Although Defendant insists that the actual amount of damages awarded will have no impact on the legal dispute, this is not true. It is possible, as Defendant acknowledges, that the New York Supreme Court could award no damages to NMR in its lawsuit. In such a case, Defendant’s motion would be moot. Further factual development in the NMR Case could therefore have a substantial impact on the Court’s resolution of the leIgIIa.l issuCeosn, acnluds tihoen motion is thus not ripe for judicial resolution. For the reasons set forth above, Defendant’s Motion to Reduce the Disgorgement [Doc. # 1325] is DENIED as premature, without prejudice to renew.

IT IS SO ORDERED.

_______________________/s/________________________________

Janet Bond Arterton, U.S.D.J.

Dated at New Haven, Connecticut this 5th day of November 2020.